Ford City Borough Municipal Sewage Disposal Authority leaders are looking to borrow from S&T Bank to help pay a legal settlement (KP File Photo)
by David Notto and Jonathan Weaver
Ford City Borough Municipal Sewage Disposal Authority leaders aim to borrow money to repay a civil court judgment issued last month.
At Thursday night’s monthly meeting, board members discussed a possible S&T Bank loan that would help pay a $400,000 judgment awarded January 19 to S&E Utility Contracting, of Harrison City (Westmoreland County).
The lawsuit stemmed from the sewer separation project – which dates back to 2005 based on Department of Environmental Protection (DEP) mandates.
Former Borough Councilman Jerry Miklos asked for more information about the loan, but Authority Solicitor Frank Wolfe said the loan agreement has not been finalized.
“(What is) the necessity of the loan? The reason why it is necessity to borrow this money and what is the amount of money you plan on borrowing?” Miklos asked.
“That’s not been determined yet.” Wolfe replied. “$270, 000 or $275,000. Depends on how much of a reserve you want to keep.
Engineer David Nichols, of Nichols and Slagle Engineering in Coraopolis (Allegheny County) added a possible complication.
“If audit report from 2015 is not presented to the bank, it may delay our closing of the loan. (But), we feel very confident we’re going to get a loan.”
Solicitor Frank Wolfe said the bank is moving forward, however, as if they will receive the audit and confirmed that now both entities do have a signed copy of the settlement agreement.
“Next payment is due, according to my calculations, on February 27,” Wolfe said.
“If the loan does not come through, I am asking that the board make a motion to approve the payment from the general fund for the next payment - which is $89,455.32.”
Board members agreed to such payment if need be.
Sewage Authority President John Thompson said the organization aims to preserve the General Fund – an account that as of January 31 registered nearly $555,000. He has also been authorized to sign the loan agreement if it was finalized.
In a public notice issued by the sewage authority last week, the authority stated background on the lawsuit dating to the year 2000.
At that time, officials write that they were issued an administrative order from the Department of Environmental Protection to install three flow meters. Five years later, Ford City was issued a consent decree that they must install five additional flow meters, implement a long-term control plan to separate storm water from sanitary water, and eliminate the overflow of untreated sewage into the Allegheny River.
Those requirements were met, but the lawsuit was filed due to “differences in opinions in the fulfillment of contractual obligations” during the sewage separation project
Originally projected to cost $1.9 million, costs ballooned to $2.6 million – of which S&E was paid $2.1 million. The rest was spent on sidewalk completion and to pave areas of Fourth Avenue.
A jury last month awarded S&E Utility Contracting more than $395,000 for payment not received, as well as $590,000 in interest payments for the past six years, but the two sites settled on a $400,000 payment.
“The primary goal of the Ford City Borough Municipal Sewage Disposal Authority at this point is to acknowledge that we accept the jury’s verdict, settle this matter and move on to future projects without any rate increases or additional cost to borough consumers,” the statement read.
Sewage customers currently pay $27.60